Feds Investigating Potential WaMu Wrongdoing

The other day we brought you the allegations of WaMu employees who said they knew exactly why their bank failed: their greedy bosses pushed home loans and ignored risk managers’ warnings.

Well, apparently that’s not good enough for the Feds, because the FBI, FDIC, SEC and IRS are launching a their own task force to figure out if there was any impropriety at WaMu.

NYT: The United States attorney in Seattle, Jeffrey C. Sullivan, said in a statement that his office was leading a team of investigators from six government agencies to examine what had led regulators to close the bank. Officials from the F.B.I., the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Internal Revenue Service are part of the effort.

“I want to assure our community that federal law enforcement is examining activities at the bank to determine if any federal laws were violated,” Mr. Sullivan said…

Still, it is unclear what the investigators are examining at Washington Mutual. Some analysts have raised questions about its aggressive accounting and disclosure practices, especially as its big portfolio of subprime mortgages deteriorated. But federal regulators cited the rapid withdrawal of nearly $17 billion in deposits as the main reason they closed the bank…

Also unclear is what entity the task force wants to investigate. Although JPMorgan bought Washington Mutual’s branches, assets and liabilities, the bank holding company filed for bankruptcy two days later.

See Also: WaMu Employees: Our Greedy Execs Caused Bank’s Failure


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